United Utilities Group Plc · LSE:UU.
United Utilities — Investor Presentation (September 2024)
14 slides from United Utilities's investor presentation, September 2024
Slide 1: Investor Presentation
Investor Presentation September 2024
Slide 2: PR24 Draft Determination Response
PR24 Draft Determination Response
Slide 3: Overview
Overview High quality plan Significant totex meeting 22/26 quality Growing RCV assessments increase 25yr programme Efficient base costs £2bn enhancement Customer led, underpinned by investment further evidenced in in line with business plan statutory drivers our response United Utilities • Investor
Slide 4: Totex
Totex Significant totex increase in AMP8 £bn 2022/23 FYA prices Ofwat has asked for additional information to support £2.1bn 16.0 investment proposals 14.0 £10bn totex programme at DD 12.0 (pre-gated schemes) 10.0 Efficient base costs in line with business plan 8.0 6.0 4.0 Key: Enhancement Challenge
Slide 5: Long-term investment drivers
Long-term investment drivers Rising investment, accelerating growth Water UK industry historical and projected spend Tightening (£m 2020, real) Environment Act environmental 2021 Legislative changes standards PFAS, microplastics Resource Replacement Renewing our ageing adequacy infrastructure Invest
Slide 6: Asset base growth
Asset base growth Rising investment, accelerating growth Nominal RCV (£bn) 20.0 18.0 16.0 14.0 12.0 Insert Picture 10.0 8.0 6.0 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY30 Guidance underpinned Annual RCV growth > 4-5% under DD *FY15 to FY24 RCV as reported at full year results, FY30 RCV a
Slide 7: Financing and returns
Financing and returns Higher WACC, with upside potential Robust financial position Ofwat 'Early Ofwat Draft Frontier Strong balance sheet View' Determination Economics (Sep-22) (Mar-24) (Mar-24) 59%* RCV gearing at March 24 Gearing 55% 55% 55% Risk-free Rate 0.47% 1.43% 2.48% Equity Beta 0.58 - 0.64
Slide 8: Risk and return balance
Risk and return balance Opportunities for improvement Gated Mechanism Bioresources Apply to the right Recognise risks projects and fund associated with FRfW financing costs Business rates ODIs Address known increases Establish balanced P50 position United Utilities • Investor Presentation • 8
Slide 9: ODIs
ODIs Greater comparability across the sector AMP7 AMP8 12 27 23 2 Common Bespoke Common Bespoke More powerful incentive rates Leakage Serious Pollutions Customer contacts Draft Determination 3.2 times greater £1.7m 1.7 times greater rate than AMP7 per incident than AMP7 Met leakage target 18 13 cons
Slide 10: Bills and customer support
Bills and customer support Average bill in real prices as per UUW response* £700 £600 £500 £400 £300 £584 £542 £559 £505 £527 £422 £442 £200 £100 £0 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 *As per table RR14, excluding CSO top-down efficiency and gated scheme proposals Affordability
Slide 11: Timeline
Timeline 28 August Early 2024 2025 UU response to DD UUG dividend policy announcement 2 October 11 July Ongoing December April 2023 2024 dialogue 2024 2025 Business plan Draft with Final Start of submission determinations regulators determinations AMP8 United Utilities • Investor Presentation • 11
Slide 12: Summary
Summary More information Significant totex Growing RCV provided increase to support a further £2bn of investment schemes Multi-AMP growth Strong balance sheet Affordable bills with investment plans in place 59% group gearing at Mar-24 £525m affordability package out to 2050 United Utilities • Invest
Slide 13: Questions
Questions . United Utilities • Investor Presentation • 13
Slide 14: Cautionary Statement
Cautionary Statement This presentation contains certain forward-looking statements with respect to the operations, performance and financial condition of the group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to diffe
United Utilities Group — Investor Presentation (September 2024) on 6ix